Successfully closed the sale of the Circle K at the NEC of Rural and Warner November 18, 2016. Aaron Chamberlin, the chef behind St. Francis, Phoenix Public Market, Postino’s and Chelsea’s Kitchen, and his partners have just closed escrow. He and his partners plan to open Tempe Public Market on the corner along with a Mexican themed restaurant in the adjacent shopping center. Matt Represented the buyer of this closing.

On September 1, 2016, Matt closed the sale of 65,000 SF of land located NNEC of Rural and Baseline for $2,400,000 ($36.92 PSF). The buyer was First Choice Emergency Room.

On October 20, 2016, Matt completed a 20 year ground lease for the SEC of Baseline and McClintock. The tenant, Quick Quack Car Wash, is doing their due diligence to have their use and plans approved by the city of Tempe. Ground rent starts at $120,000 per year with increases every 5 years.

Please keep me in mind for the leasing and/or sale of your commercial property. Send me your email address and I will keep you informed on other commercial activity in Tempe.

PHOENIX – October 27, 2016 – Phoenix-based Omni Capital Management LLC is adding a state-of-the-art self-storage facility to the vibrant growth and convenient lifestyle in downtown Phoenix. This contemporary-designed buildout demonstrates the demand for supporting businesses and services that simplify the challenges of downtown living, making it an attractive community for businesses and residents to relocate and thrive. The building, just east of Chase Field and formerly Goodman’s Furniture Warehouse, is the project of Scott Fey and Fritz Beesemyer, principals and partners of Omni Capital Management LLC. The property will be professionally managed by CubeSmart, a leading operator of self-storage facilities in the United States.

A ribbon-cutting celebration, hosted by Omni and the Greater Phoenix Chamber of Commerce, will take place, Thursday, November 10, 4-7 p.m., where invited guests include Chamber members, investors, elected officials, surrounding business owners, managers and owners of downtown apartments and condominiums, media, and employees from the City of Phoenix who have been involved with the project.

CubeSmart is located just east of Chase Field at 841 E. Jefferson Street, Phoenix, AZ.

“Downtown growth has experienced many stops and starts, but trends all across the country indicate that baby boomers and millennials want a lifestyle of convenience that can only be found through urban living,” said Scott Fey, co-principal and partner, Omni Capital Management LLC. “There is unprecedented growth of new apartments, condos and businesses downtown. Now is the time for supporting businesses to come on board to provide the logistical solutions to sustain that growth.

Fey added “Our storage facility is designed to give our Customers a clean and convenient third closet, spare garage, or extra storage room that urban dwellers and growing businesses need. The facility is equipped with multiple security features, including cameras, 24-hour DVR recording, and keypad access. With the combination of our state-of-the-art facility features and the professional assistance of CubeSmart’s onsite managers, we aim to make our Customers’ storage experience enjoyable and stress free.”

Omni took deliberate measures to build a structure to be aesthetically complementary to the artistic look of the downtown area. They hired well known architect, Tony Tang, who was the master planner on prestigious structures, including Scottsdale Fashion Square, Camelback Esplanade, and The Camby.

“I created the design so it would capture the attention of moving vehicles and light rail passengers,” said Mr. Tang. The new front is imposing and dynamic, using bright yellow and red architectural details. Mr. Tang added “Goodman’s is a well-known historic structure but we updated it to reflect the eclectic designs and vibrancy of Chase Field and the art district of Roosevelt Row. We have created a beautiful, inviting space for serving practical purposes.”

Storage units range from convenient 5’x5’ lockers for holiday decorations, athletic gear and business files, to the largest size unit of 10’x30’ for large furniture. A gated parking lot at the rear of the building has been created to store extra cars and recreational vehicles.

“We are pleased to provide management of this newly developed self-storage facility in downtown Phoenix,” said Guy Middlebrooks, vice president, Third Party Management. “It is well located and convenient to local residents and businesses needing climate -controlled, self-storage space.”

“It is great to welcome businesses like Omni’s CubeSmart self-storage facility on Jefferson St. to Downtown Phoenix,” said Jeff Durbin, senior business development executive with the Greater Phoenix Chamber of Commerce. “This kind of commitment to the city’s urban core keeps people moving here, businesses growing and Phoenix’s economy moving forward.”

About Omni Capital Management, LLC

Omni Capital Management, LLC is a commercial real estate firm owned and operated by partners and principals, Scott Fey and Fritz Beesemyer. The company was formed in 2015 for the purpose of owning, developing, and managing self-storage projects in the Western United States. Omni Capital Management, LLC is an affiliate of Scottsdale-based Omni American, LLC, a full service commercial real estate and investment firm that has been in operation of 30 years. The Omni Group specializes in the development of one to five acre infill self-storage, office, medical, industrial and retail centers in the greater Phoenix-metro area. www.omni-realestate.com.

CubeSmart is a self-administered and self-managed real estate investment trust. CubeSmart owns or manages 768 self-storage facilities across the United States. According to the 2016 Self Storage Almanac, CubeSmart is one of the top four owners and operators of self-storage facilities in the U.S.

The Company’s mission is to simplify the organizational and logistical challenges created by the many life events and business needs of its Customers — through innovative solutions, unparalleled service, and genuine care. The Company’s self-storage facilities are designed to offer affordable, easily accessible, secure, and, in most locations, climate-controlled storage space for residential and commercial customers.

CubeSmart Management currently provides all-inclusive third-party self-storage property management services for 296 locations across the United States. To learn more about CubeSmart Management third-party self-storage property management services, visit www.CubeSmart.com/manage or call one of CubeSmart’s knowledgeable experts at 877-245-1614.

For more information about business and personal storage or to learn more about the Company and find a nearby storage facility, visit www.CubeSmart.com or call CubeSmart toll-free at 800-800-1717.

Challenge

Close or don’t close a commercial retail strip center in Gilbert during the economic downturn. Horne Plaza, a 15,000 sq. ft. retail center in Gilbert was available for sale in 2012. The economy was still very soft and retail in Phoenix was not improving. Furthermore the center’s largest tenant Gilbert Center for Family Medicine was preparing to move. The largest challenge was to replace the 6,000 sq. ft. medical tenant. The second largest challenge was beyond the control of the buyer. Part of the center not for sale was a 60,000 sq. ft. former Albertsons Grocery store. The store was abandoned and there was no indication it would be replaced anytime soon.

Action

Omni One performed a value forecast for the buyer showing the center value based on a CAP rate five years in the future under a worst case, best case and most likely case scenario. Omni One also studied the retail market in the immediate area and discovered that many of the large vacant “Big Box” store locations that had been empty in the area were selling at a rapid pace. The buyer considered all of the research and made the decision to purchase what on the surface appeared to be a rather drastic situation.

Result

Omni One helped the buyer negotiate a favorable termination with the medical center leaving their lease early. Omni One was instrumental in completing a lease with a new medical office tenant. An investment group from Las Vegas purchased the old Albertsons location and leased the space to a new grocery chain. The owner successfully released a smaller tenant that was not paying rent on time and expanded the new medical tenant into their space. Cash flow of the property not only stabilized but grew with company guaranteed leases. The value of the building has improved exponentially with the buyer taking a risk but a calculated risk based on the Omni One’s work.

Testimonial

“The work and research provided by our Omni One helped us to make an informed decision on a complex and risky purchase. We believe we have substantially improved the value of the property by our purchase and hard work. The ability to pull the trigger on the purchase was promoted on the knowledge provided by Omni One.”

– Matt Garnett
Garnett Capital Corporation

]]>Finally Some Lift in the Phoenix Office Markethttp://omni-realestate.com/finally-some-lift-in-the-phoenix-office-market/
Fri, 04 Dec 2015 21:37:00 +0000http://omni-realestate.com/?p=2669Q3 2015 shows the Phoenix office market achieved record absorption numbers since the downturn and also achieved the best vacancy rate in years.

Absorption

Total office absorption in Q3 2015 amounted to 1,205,508 square feet and the vacancy rate dropped to 16.7% of all Phoenix Office buildings. Considering that vacancy has been hovering around 20% for several years that is a welcome sight for office owners.
In addition to improvements in basic office metrics, developers are still wary of overdeveloping and the current number of square feet of new office is far below the historic quarterly average. Phoenix averages around 4,000,000 square feet of future office delivery space per year and the Q3 number is 2,500,000 only the second highest number since 2009. A low delivery of new supply most likely will keep basic metrics like absorption and vacancy improving far into the future.

The best year to date absorption areas for Phoenix include:

Chandler with 448,107 sq. ft.,

Airport Area with 157,381 sq. ft.,

Deer Valley Airport with 147,438 sq. ft., and

Camelback Corridor with 100,980 sq. ft.

The lowest vacancy rates in Phoenix include:

Scottsdale South at 9.7%,

Mesa Downtown at 10.9%,

West I-10 at 11.3%, and

44th Street Corridor at 12.2%.

The best average lease rates in Phoenix include:

Camelback Corridor at $26.76,

Downtown Phoenix at $24.96,

Scottsdale Airpark at $24.94

Chandler #4 at $23.55.

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This seems like an obvious statement; however, digging deeper there are a number of issues that can impact your borrowing as you work through the process. Is the loan a size that your contact can approve through his office? Does your contact need to review your loan through Loan Committee? Is your contact on the Loan Committee? Ask the questions and understand what your contact is able to approve or NOT approve.

The Devil is ALWAYS in the details

Once you have secured a Term Sheet outlining the general agreement of your Commercial Loan and have selected the Lender you will be provided the Loan Agreement. This is an agreement you should focus on NEGOTIATING. Is there a penalty for prepayment of the loan even in a sale of the asset? If you are being provided construction financing that then goes into a permanent loan how long is the Interest Only portion of the construction financing? What is the Debt Service Ratio, the relationship between the monthly income to the monthly debt, and when does this trigger the beginning of principle and interest payments.

What Does Your Future Look Like

You may be an experienced borrower with years of commercial real estate investment activity or just starting out. A question for your prospective Banker is what is your total capacity with my firm? Most banks have some limit or capacity with any one borrower. Is the limit $5mm, $10mm, $50mm? Depending on your long-term plans you may out grow the relationship. You can always use multiple lenders and there are advantages to having lenders compete for each deal. There is also an advantage to having a relationship you can go to where there is an established trust and deals can be “green lighted” quickly

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Provide us with your name and e-mail address and we will keep apprised of future Omni One Blogs and Listings.
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After years of work by the city and involved citizens, some major changes are coming to the intersection of 32nd St. and Shea Boulevard in NE Phoenix, AZ. In April of 2012 the 32nd St. Working Group was formed by the city and the neighborhood. The Working Group had over 24 meetings to develop plans to help revitalize the 32nd St. Corridor North of the 51 Freeway. There were three committees, the Branding and Events Committee, the Transportation and Street Improvements Committee, and the Land Use and Regulations (planning, zoning, design) Committee. I was the Chairman of the Land Use Regulations Committee and wrote the report that was submitted to the city for that committee.

The Urban Land Institute also got involved and convened an ULI Technical Assistance Panel in late 2012. I participated on the panel along with Marty DeRito, Randy Heller, Lorenzo Perez, Buzz Gosnell and many others. The ULI sent its report to the city in February of 2013. Based upon the input from these two groups, city planners and staff as well as, the city Planning and Development Department came out with a new vision for the 32nd St. corridor in early 2015. This vision strove to preserve the uniqueness of the area with its proximity to the Mountain Preserve while encouraging redevelopment and repurposing of the commercial properties in the study area.

Now all of that work is starting to pay off. A new Town Home project at the intersection of Cheryl and 31st St. is going through planning and Bosa Donuts just opened north of Shea. I sold the 35 year old, 15,000 sq. ft. retail center located on a 3.6 acre parcel North of the NEC of the intersection of 32nd St. and Shea. It will be torn down and redeveloped as the View 32 Apartment complex, a four story 135 unit upscale development. The city received federal funds to help pay for a road resurfacing and restriping on 32nd St. starting at the 51 Freeway and extending north to Union Hills. That work has begun on the south end is moving north with completion scheduled early next year. I was able to sell the approximately 90,000 sq. ft. 50 year old shopping center on the NWC of 32nd St. and Shea in 2013. The new owner of the center has done renovations on the property, is building a new Walgreens on the corner, and new landscaping of the property is being installed. Ace Hardware has leased approximately 10,000 sq. ft. in this center and should be opening early 2016.

Look for more renovation on older commercial buildings in the future, but this area is off to a good start.

Scott Fey & Victor Gilgan with Omni Americnan, LLC Represented the Seller (Pinnacle 43, LLC) & Robert Kerr with NAI San Diego represented the Seller (Glendale Academy, LLC from California) on the sale of Kiddie Academy building on July 2015.

One quick tool to use in evaluating the profit potential in purchasing an investment property is the Annual Property Operating Data form, also known as the APOD. This easy to use analysis tool provides a quick look at the return on investment by plugging in basic building information. Once under contract you will conduct a more though due diligence; the APOD can tell you quickly if pursuing the purchase makes any sense (and DOLLARS!) and makes sure you don’t fall in love with the building, but fall in love with the numbers instead.

We have included an example of the tool to give you an idea of the information you can capture including; revenue, expenses, bank debt, total equity and annual increases in revenue and expense. You can see from the attached example that by adding in some basic information you can quickly determine the level of potential return on purchase.

In our example a $1,000,000 potential acquisition based on a 10% cap rate (unleveraged year 1 yield) with a bank note of 70% provides a potential pre-tax Internal Rate of Return (the annual return on equity) of 26.73% in the best case scenario and 18.97% in the worst case scenario. In this case the APOD certainly seems to indicate that this building meets my yield threshold and that perhaps I should take the next step and make an offer.

You can use this tool to narrow your choices down to the top one or two that might merit a more in depth evaluation. It is really a time saver and provides solid information based on some of the basic aspects of the buildings operating revenue and expense. This is a tool we use every day and would be happy to use it to assist you in evaluating investment properties. You can reach us at 480-21-1140, or by emailing victor@omni-realestate.com.

]]>Apartments As Far as the Eye Can Seehttp://omni-realestate.com/apartments-as-far-as-the-eye-can-see/
Tue, 14 Apr 2015 21:04:52 +0000http://omni-realestate.com/?p=2603The latest real estate cocktail conversation in Phoenix seems to be around multi-family construction. “I like that project, I don’t like the construction of that one”, “how can they get that built with no set back”, and of course “wow they are really building a lot of apartments here”. Is apartment construction the next bubble? Do we simply need more apartments do to the lack of availability of single family residential? Can the owners obtain the lease rates they will need to make the projects work in the long term?

These and other questions have been popping up around the explosion of new Phoenix multi-family developments. Some of the answers may be in the numbers, if you read between the lines. According to the ABI Multi Family study published at year end of 2014 here is the Phoenix multi-family landscape;

Multi Family Construction Year End 2014

To give you an idea of the annual delivery of multi-family in Phoenix we can look to the history since 1992. The greatest unit deliver of multi-family in Phoenix was in 2009 with the delivery of 9,315 units. The average unit delivery per year since 1992 has been 4,704 units. We certainly seem to be on track to produce over the average in 2015 and most likely a record setting year of delivering multi-family units in Phoenix.